Ted Bauman Explains Why He Does Not Invest In Bitcoin

November 28, 2017 / safemoneyman / 0 Comments

Many journalists and members of the public have been extolling bitcoin’s virtues. Ted Bauman a finance expert and technologist expounds on some of the flaws that will prevent mass adoption of Bitcoin as a mainstream currency for ordinary use.

Bitcoin is a type of currency known as cryptocurrencies. Cryptocurrencies are currencies that exist only on decentralized computer networks. The decentralized nature of Bitcoin allows the currency to be secure, private and devoid of government manipulation. Bitcoin verifies the authenticity of transactions in a process known as mining. In the mining process multiple transactions are processed in a single time before they can be approved. Any individual who is receiving or sending Bitcoins must wait for the mining process to complete before their transaction is completed. The mining process is also used to generate new Bitcoins by awarding Bitcoins to the user that verifies a specific batch of transactions.

The mining process is extremely slow compared to modern financial payment methods such as credit cards. For example, Visa processes 1700 transactions in single second with a peak capacity of 24000 transactions per second. On the other hand, the Bitcoin network can only process 6.5 transactions in a single second. This means that an average Bitcoin transaction takes 10 minutes to process. Some Bitcoin users have reported transaction periods that exceeded 40 minutes. The situation is getting worse because, as Bitcoin becomes more popular more transactions need to be processed.

Many members of the Bitcoin community have come up with various ideas that can help solve this problem. However there are two ideas that have gained traction in the community. The first one involves reducing the size of the Bitcoin block therefore reducing the amount of data processed in a single transaction. The second idea involves increasing the size of the Bitcoin block so that many transactions can be processed at a single time.